on the wells and the way ahead of its schedule 1st january full membership of bricks alongside the radio run on egypt. hudgens senior in ethiopia. a good move ahead to full cost to get on the collapse or a mistake to incur the anger of washington. someone who doesn't hold back from telling you with any money you have should be is economy as an investment, advisor jim regard sees the best selling economics that also for the pentagon in us intelligence advised that in current editor of the financial news, that's a strategic intelligency joins we from portsmouth, new hampshire, in the usa. thank you so much, jim for being on the show. you know, the, the global impact of the war through ukraine became clear, pretty quickly, arguably, garza less so. you've testified in congress on the financial modeling itself. i mean, before we get to actually the, your forecasts. why is it being, you've been warning a full gus from institutions for, for decades. maybe about why is it go to even worse the i m f, the banks? government g 7. will these people who work in those offices, what,

why they become even more terrible about forecasting the economy? well, the reason i mean, obviously forecasting is difficult. no one does a 100 percent and you're dealing and profitability. so all that sort of be given. but the question is, why this is so bad? why are they, you know, if you were, you know, just kind of drawing a blindfolded throwing darts on binary choices. you'd be right? half the time you know is if you knew nothing, you'd be right half the time just on a random outcome. but the official institutions are, were, are so that they're, they're almost always wrong. why is that? the question is you can do some pretty good forecasting if you have good models. in other words, the forecasting is based on the models, which obviously are still an approximation of the economy. and they have inputs. the inputs are all the same. we will look at the same data and you get outputs, so you're forecasting is only as good as your model. so the question is, how good is the model and the official models, the predominant models, the ones that mastery and economists use are badly flawed. and i can give you some

very specific examples. so what is, was stock market going to do tomorrow? and the next day and the next day, is that what we don't really know day today, but the mainstream economists have um a what's called a bell curve or a normal curve. and they're like, you know, it'll be kind of 5050. and then the extreme of us are very, very aware of this for that a bell curve looks like it hits the x axis pretty quickly. but that for the dentist that we just read, that does not reflect reality. if you actually look at empirical results, you look at the tequila crisis in 1994, the long term capital russian crisis in 1998. the 2008 global financial crisis. what happened in 2020? these things are happening every is 67 or 8 years. that's because of the, it's actually a different curve or something called the power curve. the power curve has fewer small events and more cataclysmic events than the bell curve. so the 1st thing that have to do is move to the power curve, but what is the power to really represent?

it represents complexity theory and complexity theory without getting, you know, to, in the ways it has what are called immersion properties. meaning, things that come out of nowhere you, she had perfect knowledge and she had all the data and perfect knowledge, things was still surprise you. well, if you know that, then don't be surprised. that was, you should tell the viewers or listeners or your clients, etc, that the shocks happen with much greater frequency. so the short answer is your, um, your forecasting is only as good as your model. and the mainstream miles are badly flawed because they assume a normal distribution of the best. but that does not line up with reality. do we have an insight into that to fluid modeling by the fact that they look at full employment and say, hey, things are getting really good. and then, you know, anyone in uh, western europe right now, what were the in the cities of the united states is going to tell you, life is tougher than it's ever being, regardless of the latest quarterly sophistic. and that's a very good example uh option because label, 1st of all, what there's

a low unemployment numbers don't transition united states. so on a plan is about 3.8 percent get retake, which is so low as since the 1960 something that i read where they were they don't tell you is that there's a very large cohort. 8 to 10000000 americans who are not working there, you know, between 25 and 54 subprime working age. they're not working, but they're not counted as unemployed because they're not looking for jobs. they're, you know, watching sports or reading advertisers or something or what, but the point is if you include that group in the unemployed deal employment rate, we're actually more like 10 percent, which is depression level unemployment. so that's the 1st thing. the 2nd thing, they don't say you have a job that's great. the number of part time jobs, as opposed to full time jobs, is, is very high relative to, to baseline. so you, you can barely get by in the united states on, on a full time salary. we forget about a part time salary. and lot of people have

a 2 part time jobs and the labor department house. so there's 2 people working was only one person, but they're working 2 jobs, so they get county. so do you seriously saying they don't get these people with the i am i find that the treasure us treasury deposited? i think you've explained it. afraid, smith, you, the wireless celebrate. i'm the financial journalist who celebrate via regular lo unemployment as well. they might as well handle palm thompson and the ad college sweaters because they're like cheerleaders. i mean their job, the what the job of wall street is to sell you sucks the job to the central banks and the math is to engage and happy to are they? do you ever hear the fed have you ever or the fed? i've been calling this for 40 years, so do we think there is going to be recession next year? they never say that we've had 10 recessions by the way, since 1974, but or 69 rather. but they'll never say that so. so 1st of all, there is lot of happy talk. secondly, they do have a 4 miles. we talked about that, but just to pile on a little that unemployment is a lagging indicator,

meaning that it'll go up in the recession, but not until you're already in the recession. if you're using unemployment to forecast the recession, you're never going to see are coming. because the employers or companies are entrepreneurs, if they're, you know, or sales are going down or, you know, the volume is going down cetera. they'll do everything else 1st before they fire people, all the time of life. so negotiate is cheaper, right? so um, you know, car cost, wherever they can use paper napkins instead of cloth of the laundry fire and people's, the last thing they do when they get around because people are valuable and hard to recruit. when they get around the fire and people you're already in the recession. so if you see unemployment, the last for example, or you're going up to 4 or 4 and a half, 5 it's, it's too late. so there's no forecasting benefit from unemployment numbers because there are a lagging indicator. but again, the fed as marriage is something called a phillips curve, which says, you know, unemployment and inflation or inverse simulators. so if, if i'm time is low,

inflation is high. if unemployment as high inflation as low, that's their model right now on employment is low. so they think inflation is going to be high. there is no evidence for them all the in the empirical data just as supported. and 1977. we had very high unemployment and very high inflation. of, you know, i remember 787980 inflation was 15 percent of plan was 10 percent, a self sauls curve that's those and those things are not inverse simulated. they both went up and by the same token union of periods of low unemployment and low inflation. that seems to be the one that's terrifying. the low unemployment in low inflation as to uh, i don't know whether they're using the potato chips cuz as you mentioned that some of those people, you know, that's just laid capitalism, making them depressed. that's why they're on the sofa. give me that. i mean, it's freaking of the low inflation unemployment then. i mean, if that's happening to economies, especially in west and europe and,

and the united states could what happens in the middle east to be enough to tip it over. because it's being bubbling along like this could something, uh, chip it over and what was going to happen any way i do want to get onto optimism because you are optimistic as well and to what people should do to navigate these things. but could, could what's happening in the middle east, tip it over. absolutely. there's no question about it. let's hope it doesn't, but the potential is there. so, you know, i don't need to kind of go through what's going on the battlefield. i mean, we all, we get planning information on that, but we really want to, i mean, things are happening, hour by hour on this, the overall allow me a little bit in terms of geopolitics is, i mean, famously this, out of the, as out. he said no to the by, to ministration to problem or while right before before the, all this current flare up of activity there in the us right now, the us has moved to aircraft carrier battle groups into these, to mediterranean, and put a nuclear attack somewhere in the red sea, now they're,

they're all in the us only has 11 of these battle goose by the way, such as an aircraft carrier. they come with cruisers, destroyers, submarine supplies, ships a wire. so a lot of those we have 11 of those and they're in their entire please. and any given time for them are in for repair and maintenance or dry dock or whatever. so 7 are kind of online and i've 7 in the world. we've moved to, to the eastern mediterranean, that is a huge commitment. by the way, china only has warranty with us. as 11 china is one rush. it has one or 2 buses, your system license plate. so why, and they've got f 35 fighters, enough sixteens and the cruisers have christmas. this is why the share prices of these companies making all of this stuff has been going and performing very well. it's cage in new jersey or wherever ready? on lockheed martin. i mean, they're all on our recommended list. i sent him in the oil company, chevron, exxon mobil cetera. they're, they're gonna be big, you know, the worst tragic,

but financially they're going to be big. what are some of this? so what the, why is the us put that much power in the eastern mediterranean is not surprising. moss is to fight around if it comes to that. um, but it ran has a lot of options as well, including close. it goes in the uh, the, the golf clothes industry. so for most, if any of those things even get close to happening and are dangerously close today, the price of oil will go to $200.00 a barrel was, you know, just get, i mean, away from the politics. and the tragedy in the united states isn't that ex, border of oil. so will that immediately redid it ends for the united states and oil costs that much a well, the problem with the oil is it really does have a world place you write to us, isn't that ice border? so the reason why your explorer, they sell the world a china, you a, a cetera. but as a world price, you know, brent and you a west texas intermediate and they tre, futures. so i, i,

the christ just because you're an export or that's probably a comfortable place to be. but the, any destruction of the time we're talking about was send a global price skyrocketing. now that happens to be a winful for exxon chevron and other a, a pioneer, other companies in the permian basin and in texas. but uh it, but as a burden on developing economies isn't as a burden on europe, which is an oil importer to burn on china, which is an oil importer. so in a grossly slow, the global economy. okay, i'll get the west and you are going to 2nd, but isn't it good for the united states? i mean, i still don't understand. maybe you can explain why it desperately needed to help them a doro and venezuela to cub short term shortages of oil. when it's and then it will export, but you've got to madison of keynesian reconstruction because of each me style being fired to kill children that has to be replaced each. uh and you're sending the aircraft carriers that are these parts. so obviously need refurbishment billions of dollars of u. s. federal aid. well,

federal spending into military technology. you have all of those levels, which can be mitigated by government subsidy of some kind of manufacturing, perhaps in the united states, perhaps by a future us government. if we leave western europe to one side, surely the united states isn't such a bad prospect. a $200.00 barrel or a $150.00 barrel. i only get, i'm not saying it's going to have to i'm saying that could happen in this in certain geo political scenarios. i guess i have the pump of go from the $4.00 a gallon to $10.00 a gallon overnight with this happened before this happened and 1973 when they are boiling. barbara was, imposes result of the, um the, the uh the, the, the option for work as uh right. so uh uh, oil went from 4 dollars to 12 dollars, 12 to 12 hours. sounds pretty cheap, but it was a 300 percent increase and the economy, us economy went into the worst recession since the great depression. in 1974 and

the stock market crash, 50 percent. so yeah, i'm is your went for, for oil companies. yes. and if your owners only feel good for you, but that does not translate into benefits for consumers, and the u. s. will not socialize it by the way. there's a large cohort in us politics. that would like to put the price of gasoline to double because they ran on the screen to scan, and they actually want, they want to get rid of internal combustion engines. they want to get rid of so called fossil fuels. they want, you know, a solar panels and windows and all that which don't work by the way, but they're, they're pushing now. so for, for many of them for the job, mcgrath, i'm our secretary of energy. they think $10.00 a young guessing is a good thing, but that's it. that is why do we get here? just kind of moving him over to visit by to him, right? gods. i'll stop you that more from the best selling economics. it was a former pedagogue advisor, an editor of strategic intelligence. after this break, the

or the loop, you will have given the dates as many in the west without you as being a foolish and wasteful enterprise. instead of the building our domestic societies, we have to i to have a coast based model, externally, which of course states simply will not accept which is like to this conflict and relate to the 2nd code more the

welcome back to going underground. i'm still with the bestselling economics of the former pedagogue, advisor and editor of strategic intelligence. james reco regards jim. uh you, we were talking about the yeah, your environmental uh, ideas of, uh, different uh, blocks within power in the united states as to the horrors of the i a fuel prices. uh no. the, the, the same groups are very good at predicting the outcome of the ukraine crisis. clearly, i think, i mean, it's now going through recent history. i suppose. why did they think that the sanctions on russia would as a work as well. uh, you know, she, you said as if you said they wouldn't, i should say you said they would,

wouldn't even when they were being implemented, i said they wouldn't were before they were being able to manage all depending on that. and by the way, i, this is the former advisor. i take the compliment, but i actually choose financial were fear of the are some of the work hours. and i had a class and april of 2022. so just a couple months after the special ed military operation started and you can uh, and as the seminar southwest 13 handpick officials give all the rest of the military present televisions and a search bar man. i should, this is a mid mid career future. big branch tree, sure. 3 star generals, national security advisers, etc. and so in 2022 right after the war and ukraine started, i said the sanctions and are going to work. in fact, they'll be worse than ineffective. they will actually backfire and hurt the united states more than not hurt russia. they will not. so russia down at all. now the class has already gone. how and a, you know, ladies use the accounting manager and their tillery out of navy commander,

i and they're 16 part of the south, right. and they were giving me a lot push. it was just fine. i, you're welcome. that is seminar format. but i explained why they wouldn't work on why why she's just selling oil, you're going to sell to china and india, which they've done, why they could gear up, put their economy on a we're funding, which they've done by the way, 4th quarter of 2023 we kind of, you know, a very recent data looks like the, what the russian economy is going to grow about 5 percent is eve and on an annualized basis as overheating. and the us economy may be 1.2 percent. so as such as rush, it hasn't been crushing, never buying it, we're going to crush the world, but we're not to destroy the ruble. guess what? the, we will, you know what it did for about a minute and then went back to the pre war level, a 70 rubles of the dollar. just a little weaker is about 90 with most of the dollar with us, not a huge change the roubles doing fine to the russians. they have the best central banker in the world of here, and that'd be elena. what she did, she's worked,

been working on this for 10 years and i've filed it for over 10 years. she put 25 percent of brushes, reserves, and gold, physical gold, housing custody in russia. you can freeze gold, you can see that it's not digital is doesn't rely on swift. so these prohibitions had no impact on russia's, a large percentage of russians, users, because it was in physical bullion, you know, in, in, in, in russia. so they, they thought it had the russians, you know, the chest is their national sports. they think 3 moves ahead of us can barely think one move ahead. but so me what was happening in the us economy. we're, we're, we may be in recession. we're certainly heading for one, but we might actually be in one growth of 4 in the 4th quarter looks really weak. and one of the reasons people to inflation is coming down is not a victory. well, you have to ask yourself, why is inflation coming down? is coming down because the consumers checked out, credit cards are tapped out. they've used other savings, you know, is when you,

when to a recession. yeah. inflation comes down a lot, but is not a good thing because you were in a recession. i don't know what their arguments were against your statements at the seminar. i missed you are seriously saying they're a chinese spies were russian agents in the war college because clearly to the benefit of a multi polarity of countries in the global south, in the arabian peninsula. it's been amazing the south sanctioning by the united states and nato countries. why? what were their arguments against yours? the sanctions would rebound and beula, right as well. they didn't have strong economic taken our gardner. so i think everyone was just beginning of the war. emotional america is gonna support is for your credit, i think was mostly of a my job is as a seminar leaders to, to some of now i, i did the course again in the spring of 2023 uh about. uh, you know, in, um, uh, in, in may actually, and i, so i'm finally class i was 2023. so let me tell you what i told last year's class.

i said it was saying she's going to fail. you're going to go right. here's why i always back it up with a specific and i said to them everything are said was right. everything i said a year ago is right, and we're not to debate it because it's played out and you can see it in the day that they were much montana with a very interesting experience. i have a lot of information channels that are, it's very, very hard to know what's going on. ukraine's really difficult because the new york times the washington post international times economists, they all live basically says, read them the way i used to be proud of doing the co workers or all lives. but it's always interesting to know what your opponents are lying about. because that inferentially tells you what they actually care about. so you can use it, you can lose, you can use lives through the media using inferential method and base their on to actually figure out what they're thinking as an intelligence technique. but i say that they're all lying, but it, but you know, answers to the lying about. so how do you get good sourcing from ukraine, from,

from the battlefield and economically as well as out there. you have to, you know, you have to call them later and i spent most doing that. so i was, i'm describing this. so one of the brakes are very smart, very nice lady from the state department. took me aside and she said, jim, could you give me those sources? i started the course and i sent her an email i. i gave her all the lice, but in my i thought to myself, wait a 2nd. you have the top secret security clearance. you're a senior at the state department and there's stuff you know, beyond this, obviously you really can't even talk about. so i said, why are you coming to me for sourcing? but what it tells you is that she was getting a diet of, you know, lives with us intelligence community or certainly from the us media. but i give her credit for reaching out to say what box and i got some great information and that's a really dispute. and that's a very disturbing story in the context of how many of been killed currently. and the how many lives center live we're going to have been lost. i know you're critical of chinese economy. i don't go too much into that, but i would say,

and we will get on to what people should be putting the money in. i mean, how careful it continually they're encouraged developing nations by what's happened post ukraine. how careful do countries have to be about unwinding boned positions, treasury bond positions in the united states, which is always being a fair. but how careful do they have to be diners, especially guys here, and that is the fear and very few people really a handful actually understand what's going on, but i can, i can explain it so. so the us treasury publishes day is called the tech report and it shows who owns us treasury securities. you know, china, japan, taiwan, you know, and others, adults of european countries. we actually, i mean, i think the biggest certainly luxemburg and island and so well, this is the luxemburg in belgium. actually belgium is that there,

there are intermediaries for china. when you see belgian data or came in the analyst day, that's really chinese data, right? you have to know, they're just, they're just using fronts and cut out the statistics. you think white as belgium own so much of us debt. a shot is shot. there's a front bridge on it. that's the answer. but getting back to china, so you put all that together. so chinese solar is of us government securities are declining. that's the fact. and same with japan and people go, obviously they're dumping the treasury, they're losing faith and the dollars are not true. there is, they are desperate for dollars that the csc opposite. there's a global dollar short is just behind the curtain, you're less than your dollar market ongoing. what's, what's going on behind the card? it's not the central banks are not in control. the commercial banks are in control . jp morgan city, barclays, hsbc deutscher bank. you're gonna credit bunk percent and they're, they're the ones that actually run the system and create, they create, they print their own money by making laws. so there's a dollar shortage and you need,

cuz all the banking houses in the world combine are in the, are in the trillions choices of dollars. but the notion of the rivers which are off balance, she is one quadrillion dollars. and for people who don't know that you were a quadrillion, is a 1000 trillion of so much you haven't driven us, they're extremely highly leveraged, and you have to put up collateral to support your positions. well, what's the best collateral? 3 months, treasury bills, 6 months, treasury bill, they don't even want to your treasury notes or 500 treasury notes. they want this really short term treasury bills. well, if you're in georgia back or you raise just be say, and you want to get treasury bills as collateral. you need dollars to buy the bills . and so one of the reasons the dollar has been so strong and the depth a little bit. and recently, for the dollar has been very strong for a year and a half is because there's far from dumping the door. there's been a mess, scramble to get dollars to buy treasury bills to support your dream dispositions. when you see chinese, us treasury positions declining. what's going on as they're selling,

the treasury is to get dollars to pop up their own banks the past. so really just, it's not the part from the strength and the a slowness, and then you bricks will. okay, well very quickly, we're running out of time really quickly. why is your favorite uh, precious mental, not performing as well as it might. i'll i know you've got a new wants to analysis of the gold for so so many years explain why it hasn't belonged as a magically as perhaps some would have wished it for if they had put money in and how eventually it will well 1st. so i would say that is, i would ask you a different question. when interest rates and short term interest rates went from 0 to $5.00 and a half percent in less than 2 years. and 10 year treasury now you know, the maturity went from 2 percent to 5 percent in 2 years. why the goal not go down?

that's the point. the fact is, the fact is kind of a level around 1950 uh, you know, between nice to buy to every $1000.00. now. in other words, with interest rates, sky rocketing, that's usually a killer for goals, sands, gold, crashing. but the fact that gold has held up in the face of extreme interest rate increases is actually sign of strength because it should have done it usually interest rates and go probably the dollar 1st of all are move inversely. but here, the extra stress of one of the goals is held. and so the reason for that there are buyers, but they're not, not retail americans have given up. and they, they don't really understand, go to the central banks, the russian central bank, the people who will very quickly the retail. well, clearly i understand that then that and the resilience factor, but didn't very quickly where should the retail invest? uh, i put a gold still worthwhile in the face of uh you can only catastrophe in western europe in the united states. absolutely. and, and just to be clear, i recommend a 10 percent allocation of going, you know, seasons a chase,

if you more comfortable 5 percent or you want little bit more that's up to you don't put 50 percent in gold. don't put a 100 percent goal that's. that's just bad investing, no matter what the asset classes. ok. 10 percent. yes. well we're not giving investment advice. we have to say of course and but i'll put a you know, my $0.10 which is 10 percent from my assets. definitely in the gym regards. thank you so much. thanks. that's over the show. remember, we're bringing you new episodes every sunday and monday until then. you can keep in touch by all law social media of is nonsense of in your country and i to a channel. the grantee on mobile don't come to us and even though the episodes going on the right see soon, the phone just goose, tiny little audits this style,

which makes it nice. just sensitive space picks up the printer, which is the story i just use for mobile to thank you so so so what are you good. i used to be asking the the

and it's amazing what can happen over the course of a few months, not long ago buying was in fabric that the us went back to craig as long as it takes. now, it is as long as we can. what happened, no doubt, the regime and to have this taken down the,

[000:00:00;00] the disturbing images that had the red pressing says 3 people injured and 6, sorry, 3 killed and 6 injured in his very attack on the refugee camp in central gossip. also, a head eventually started with people that are leaving in overcrowded spacing sports that we can show to. i mean the days when sunday is he's almost always by the lights on wides by a red cross, the official cells all to the palestinians in gaza, all facing an epidemic of highly infectious diseases. that's due to a severe shortage of medical supplies. and this is the devastation and catalogs and tar the region that was considered the most beautiful in northern and gaza as face